The Office of Inspector General (OIG) reported that prescription drug abuse continues to grow in this country, to the point of being an epidemic problem. The OIG stated that improper use of pharmaceuticals and overuse of opioids has resulted in over 1.4 million emergency department visits and 700,000 inpatient hospital stays a year, much of which is a result of drug diversion.

The OIG report recapped problems identified with drug abuse and diversion in Medicare Part D since its inception in 2006. Between 2006 and 2014, spending for commonly abused opioids grew from $1.5 billion to $3.9 billion, an increase of 156 percent. Growth in spending for these opioids outpaced both the growth in spending for all Part D drugs (which grew 136 percent) and the growth in the number of beneficiaries receiving Part D drugs (which grew 68 percent). The OIG highlighted ongoing concerns about the levels of abuse and diversion of Part D drugs and uncovered significant levels of questionable billing associated with pharmacies, prescribers, and beneficiaries involving both controlled and non-controlled substances. This, in turn, raises concerns about the adequacy of oversight of the Part D Program. This report was issued tandem with a portfolio, Ensuring the Integrity of Medicare Part D (OEI-03-15-00180), which summarizes the OIG’s body of work and provides an update on CMS’ efforts to address the weaknesses in Part D program integrity identified by the OIG.

The OIG has made a variety of recommendations to better safeguard the program and protect beneficiaries, many of which have not yet been implemented. As such, issues with fraud and abuse continue to exist in Part D. They relate to both controlled substances, such as commonly abused opioids, and non-controlled substances. The diversion of non-controlled substances from legitimate to illegal purposes is becoming more common and fraud related to these drugs can present a significant financial loss to Medicare. Examples of non-controlled drugs include respiratory and antipsychotic medications.

The OIG analysis of prescription drug event (PDE) records from 2006 to 2014 has evidenced trends in spending for Part D drugs. Further, the report noted that geographic hotspots for specific non-controlled drugs vulnerable to fraud and abuse exist. The report identified a number of retail pharmacies with questionable billing practices, including:

1,432 facilities that billed extremely high amounts for at least one of five measures reviewed in the report;

292 facilities that billed extremely high amounts for multiple measures;

403 facilities that billed an extremely high number of prescriptions per beneficiary (for example, over 62 prescriptions per beneficiary in one case);

468 facilities that billed commonly abused opioids in an extremely high percentage of their prescriptions;

216 facilities that billed beneficiaries who averaged at least four prescribers for commonly abused opioids;

314 facilities that billed a high number of different types of drugs per beneficiary; and

332 facilities that billed high proportions of beneficiaries who received excessive supplies of at least one Part D drug in a single year.

The report credited CMS with making progress in its Part D program integrity efforts, however evidence of its reviews demonstrate that more needs to be done to address fraud and abuse. A program expanding at the rate of Part D requires continuous development and refining of methods to uncover, address, and prevent fraudulent activity. The OIG noted that its commitment is to continue monitoring pharmacy billing and conducting investigations of questionable billing, however it also called upon CMS to employ all of the tools at its disposal to more effectively identify and fight fraud, waste, and abuse in the program. The OIG states that this requires CMS to take action and fully implement the OIG’s previous recommendations.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.